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Lesson for Wisconsin: Carolina tech industry took time to build

Appleton, Wis. - The president of an economic development group credited with spurring growth in the famed North Carolina Research Triangle Park says Wisconsin is in much the same position the Tar Heel State was 20 years ago, when it began to build a more robust entrepreneurial culture.

Monica Doss, echoing remarks made earlier by Cisco System's John Morgridge, said the Council for Entrepreneurial Development, which is situated in the research triangle, originally had misdiagnosed North Carolina's primary challenge.

"North Carolina was risk averse 20 years ago," Doss said. "That was actually the first thing we learned. We thought our problem was that we didn't have any capital, but what we really found out was that we didn't have much of an entrepreneurial culture."

Doss visited the D.J. Bordini Center in Appleton to address members of the Wisconsin Innovation Network's Northeastern Wisconsin Chapter. While there, she was reunited with Paul Jones, one of her protégés, who has returned to Wisconsin to apply what he learned during his tenure at the CED.

The purpose of her visit was to share insights from CED's experience of the past 25 years. In that time, Research Triangle Park, bounded by Raleigh, the state capital and home to North Carolina State University, Chapel Hill, home of the University of North Carolina, and Durham, home to Duke University, has grown to over 100 companies with nearly 40,000 employees. Its largest occupants are IBM, GlaxoSmithKline, and Cisco, but it also features names like Bayer and Nortel.
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Twenty years ago, North Carolina had no resident venture capital, but now has nearly $1 billion under management. When Doss started, most of the people who had money had made it in real estate, agriculture (tobacco), and manufacturing, and it wasn't easy to get them in a technology comfort zone. The resulting growth was a combination of internal persistence and outside help.

"It really was about telling the story over and over again, and educating an entire community, little by little, bit by bit, about how entrepreneurship works and where the risks and rewards are," Doss said. "To be honest, what quickened it was having some influx from outside the state. I think we were getting there anyway, but in the late 1990s we also had Cisco land a plant there and hire about 800 people from all over the country. That's one of the types of things that kind of helped us."

The CED has provided support for entrepreneurs through mentoring, business education, advocacy, and by building a network of entrepreneurs. Its mission complements the state's collaborative nature, which Doss described as a building block for entrepreneurialism. "I think the one thing we do have as a state and as a community is a very collaborative nature," she said. "People that come from other parts of the country always remark about the fact that our organizations work very well together, that people tend to put the interest of the community above their own.

"That's really been the foundation for building this entrepreneurial culture because we had nothing, so we had to all work together to get somewhere."

Okay to take risks

Paul Jones, president of the fledgling Council for Innovation, has come back to the Fox Valley from North Carolina, where he spent 15 years with CED, including a stint as chairman of its board of directors

CFI, which is based in northeastern Wisconsin, is modeled after CED, and it's encountering the same risk intolerant culture that once existed in North Carolina.

"I think it's important to build a culture not just of innovation, but a culture of risk-taking that makes it more acceptable to fail," Jones said. "I had a VC describe to me, when I said I was going to move back to Wisconsin, he said `the problem is that in Silicon Valley, if you start something and fail, you're an entrepreneur. In Raleigh, if you start something and fail, you're a failure. But I think in Wisconsin, if you start something and fail, you're a criminal.'

"I think that's something we need to change."

To begin the long building process toward critical mass, Jones has taken a page from CED's playbook and has begun to form a network of area entrepreneurs to share ideas. In the past eight months, he has found a half dozen entrepreneurs to get the ball rolling, and given another aspect of the culture, it won't be easy to foster collaboration. Whereas risk-takers in Silicon Valley and North Carolina are well connected, Jones said people here are more isolated.

"I think one of the things that CFI can do, that we hope to do," Jones said, "is provide that network to connect people, to give them a place to go and be with their own kind, so to speak."

Jones, a former life science venture capitalist, would love to help build a life-science industry here, but without a major research institution, that isn't as realistic as playing off the Fox Valley's industrial base. He sees manufacturing innovation, not just to cut costs but develop new products, and software development as the region's technological bread and butter.

"I'm a big fan of software," he said. "I used to be a professional life science venture capitalist, but biotech takes lots of time and lots of money. I'd love to see that happen here, but I think many of the projects I'm working with here are software deals. And if you look at the first generation of companies in Raleigh, Durham, and Research Triangle Park that succeeded, a lot of them were people from N.C. State who quit when they were juniors and started software companies.

"They [software deals] don't take as long, and they don't take as much money. You get a quicker return, and the risk is easier to understand for people than biotech."

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